August 21, 2017

Stocks shattered by Spain terror attacks as investors flee to gold & cryptocurrencies

A police officer talks to people attending to injured persons at the scene after a van crashed into pedestrians near the Las Ramblas avenue in central Barcelona, Spain August 17, 2017. © Giselle Loots‘Intended to kill as many as possible’: Extremely graphic footage emerges from Las Ramblas attack

The pan-European STOXX 600 was down 0.29 percent, rebounding from a 0.9 percent loss. Tourism and airline industry stocks took the hardest hit.

Easyjet, Ryanair, British Airways owner IAG, and Lufthansa were all in the red, down from 1.9 to 2.7 percent.

Spanish airport company AENA was down 1.52 percent, recovering from a two percent drop.

“As we’ve seen over the last couple of years in Europe, these kinds of atrocities affect tourism and will hit airline earnings,” said Neil Wilson, an analyst at ETX Capital, as quoted by Reuters.

Spanish stocks are leading the selloff in Europe with the IBEX in Madrid down one percent. The British FTSE100 was down 0.98 percent, Germany’s DAX dropped 0.58 percent, and French CAC40 slid 1.06 percent.

The US stock market closed with big losses on Thursday but is set to open in the green.

SP futures are up 0.05 percent, Nasdaq futures 0.25 percent, and the Dow was up 0.01 percent.

“The Barcelona attack is just one catalyst for the selling, with issues in Washington also causing investors huge concern,” said Rebecca O’Keeffe, head of investment at Interactive Investor told CNBC.

Investors are hesitant whether US President Donal Trump is able to realize his ambitious economic goals, such as tax cuts and infrastructure spending.

As usual after such events, gold surged. Bullion was up 0.65 percent, trading at $1,300 per troy ounce.

Cryptocurrencies, which are now considered by some experts as another safe haven, also rose on Friday.

Bitcoin is up over two percent, trading at $4,407 per token, while its main rival ethereum is over six percent higher.

Article source: https://www.rt.com/business/400093-stocks-barcelona-terror-attacks/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Technology behind bitcoin could replace physical gold trading

© Lucas JacksonAre bitcoin other cryptocurrencies overhyped dangerous?

Exchange owner CME Group, TradeWind Markets, and financial technology firm Paxos are working to make the $27 billion-a-day gold market digital.

The companies say it will add more transparency and security to the gold market.

“Digital gold would take market share away from other gold instruments: futures, physical gold bullion, gold ETFs,” Ebele Kemery, head of energy investing at JPMorgan Asset Management told Bloomberg.

Blockchain can be quite handy in gold trading, as it is safe and fast, says Pierluigi Paganini, CTO at CSE Cybsec Enterprise.

“It is quite secure from the technical perspective, but you have to trust the entire system. It is for sure faster than traditional trading, and it is cost-effective,” he told RT.

“It overcomes the difficulties like moving gold around or transporting it quickly,” Paganini added.

James Turk, the founder of GoldMoney and Lend Borrow Trust, told RT that people will still stick to traditional gold bullion, as it is physical, unlike bitcoin and other cryptocurrencies. Also, blockchain will not solve the problem of the physical delivery of gold.

“Physical gold is a product of nature that has served as money for 5,000 years. Bitcoin is a man-made product with less than ten years of history. Also, gold is something you can hold in your hand, whereas bitcoin is essentially just a mathematical formula,” he said.

READ MORE: $1 in bitcoin seven years ago is valued at over $1.4 million today

Bitcoin, one of the first digital currencies to use blockchain, has more than quadrupled in price this year to more than $4,300. A single token is worth 3.3 troy ounces of gold as of Friday.

“Prices for bitcoin depend exclusively on the relationship between offer and demand. If we consider these aspects, then it makes sense. There is no centralized organization that establishes the price of this cryptocurrency,” Paganini said.

Article source: https://www.rt.com/business/400063-bitcoin-blockchain-gold-trading/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

No winner in trade war between US & China

“There is no winner in a trade war. We hope the relevant people can refrain from dealing with a problem in the 21st century with a zero-sum mentality from the 19th or the 20th century,” said China’s foreign ministry spokeswoman, Hua Chunying.

Chinese President Xi Jinping and U.S. President Donald Trump. © Carlos Barria / ReutersTrump threatens China with new trade war, Beijing appears unmoved

The warning came in reply to a stinging comment, made by Steve Bannon, the US President’s political adviser earlier this week.

Bannon said Washington was losing the struggle with Beijing but was due to hit China hard over unfair trade practices.

“We’re at economic war with China. It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years, and it’s gonna be them if we go down this path,” Trump’s chief political strategist said as quoted by US news site prospect.org.

“If we continue to lose it, we’re five years away, I think, ten years at the most, of hitting an inflection point from which we’ll never be able to recover,” the politician added.

The White House is reportedly planning to adopt Section 301 of the 1974 Trade Act against alleged Chinese coercion of technology transfers from US corporations working in China. The US also repeatedly accused Beijing of dumping prices for steel and aluminum.

The Chinese authorities have highlighted the importance of mutually beneficial relations between Washington and Beijing.

“Economic cooperation between the countries has already brought much profit to the nations,” Hua said, calling for a productive dialogue to “preserve the sound and steady growth of China-US relations.”

Earlier this week, Donald Trump ordered an investigation into whether the Chinese government improperly demands foreign firms hand over technology as a condition of market access.

Theft of intellectual property by China may cost the US about $600 billion, according to the Trump administration.

Article source: https://www.rt.com/business/399896-china-us-trade-war/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

No winner in trade war between US & China

“There is no winner in a trade war. We hope the relevant people can refrain from dealing with a problem in the 21st century with a zero-sum mentality from the 19th or the 20th century,” said China’s foreign ministry spokeswoman, Hua Chunying.

Chinese President Xi Jinping and U.S. President Donald Trump. © Carlos Barria / ReutersTrump threatens China with new trade war, Beijing appears unmoved

The warning came in reply to a stinging comment, made by Steve Bannon, the US President’s political adviser earlier this week.

Bannon said Washington was losing the struggle with Beijing but was due to hit China hard over unfair trade practices.

“We’re at economic war with China. It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years, and it’s gonna be them if we go down this path,” Trump’s chief political strategist said as quoted by US news site prospect.org.

“If we continue to lose it, we’re five years away, I think, ten years at the most, of hitting an inflection point from which we’ll never be able to recover,” the politician added.

The White House is reportedly planning to adopt Section 301 of the 1974 Trade Act against alleged Chinese coercion of technology transfers from US corporations working in China. The US also repeatedly accused Beijing of dumping prices for steel and aluminum.

The Chinese authorities have highlighted the importance of mutually beneficial relations between Washington and Beijing.

“Economic cooperation between the countries has already brought much profit to the nations,” Hua said, calling for a productive dialogue to “preserve the sound and steady growth of China-US relations.”

Earlier this week, Donald Trump ordered an investigation into whether the Chinese government improperly demands foreign firms hand over technology as a condition of market access.

Theft of intellectual property by China may cost the US about $600 billion, according to the Trump administration.

Article source: https://www.rt.com/business/399896-china-us-trade-war/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia stays ahead of Saudi Arabia as top global oil supplier

© Tobias SchwarzUS sanctions won’t stop Russia’s pipeline project to Europe – analysts

Russia produced 10.36 million barrels per day (bpd) during the month, while Saudi Arabia pumped slightly above 10 million bpd.

The volume of production in Russia, according to the organization, increased by 0.47 percent in comparison with May, while Saudi Arabia saw a 1.92 percent growth.

Saudi oil exports dropped to the lowest level since 2014, as the kingdom sold 6.9 bpd abroad.

JODI explains the Saudi boost in crude production with the Muslim month of Ramadan when the use of electricity surges. It lasted from May 27 to June 25 this year.

Saudi crude stockpiles stood at 256.6 million barrels, the lowest since January 2012, the report says.

“You can assume exports will fall even further going forward because they can’t keep running down stockpiles. It is clear the rebalancing process is in full swing, we are drawing down stockpiles everywhere,” said Amrita Sen, an analyst at Energy Aspects, as quoted by Bloomberg.

OPEC’s second largest producer, Iraq, reduced oil production in June by 0.31 percent, to 4.55 million bpd, according to the report.

Crude prices were down slightly on Thursday, as Brent slid 0.02 percent to $50.25 per barrel, while the US West Texas Intermediate stood at $46.71.

The US Energy Information Administration (EIA) reported on Wednesday that commercial US crude oil stocks dropped by almost 13 percent from their peak in March to 466.5 million barrels. The US oil reserves are now the lowest this year.

“If inventory declines continue at this pace, stocks will fall back below the five-year average in around two months,” said William O’Loughlin, an analyst at Australia’s Rivkin Securities, as quoted by Reuters.

Article source: https://www.rt.com/business/399868-russia-saudi-arabia-oil-production/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Russia cutting dependence on US dollar – economy minister

“There is a big trend toward the de-dollarization of the Russian economy. The central bank has taken some very important steps against loans in foreign currencies,” the minister said on Wednesday.

© Natalia SeliverstovaRussia to reduce reliance on US dollar payment systems in response to sanctions

Data from the Central Bank of Russia shows 60 percent of Russia’s external debt in August is in US dollars, the lowest since 2014.

Experts say foreign sanctions and central bank policy are making loans in rubles more attractive than in dollars. Rates on ruble deposits are also more attractive than foreign currencies.

In June, Russia reduced its investment in US Treasuries by $5.8 billion, dropping to 14th place among the largest holders of the US debt with $101.9 billion.

However, while loans in rubles are becoming more popular, it’s too soon to say if the Russian economy is ready to live without dollars.

“You need to look at the share of foreign currency deposits. In retail, there is no big decline, the share of foreign currency deposits remains at 23 percent, it is quite stable over the past year,” said Alfa-Bank chief economist Natalia Orlova in an interview with RIA Novosti.

Last week, Deputy Foreign Minister Sergey Ryabkov said the Russian government would intensify efforts to cut the country’s dependence on US payment systems and the dollar as a settling currency.

READ MORE: Putin says dump the dollar

Russian President Vladimir Putin has repeatedly urged the economy and finance ministries to cut dollar dependence in the Russian economy as relations between Moscow and Washington have soured.

Article source: https://www.rt.com/business/399790-russia-ruble-dollar-economy/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Are bitcoin & other cryptocurrencies overhyped & dangerous?

Anonymity is not always right

In the most recent incident last week, hackers demanded a ransom of at least $6 million in bitcoin from HBO to stop leaking spoilers and episodes from the new season of Game of Thrones. Bitcoin transactions are ideal for criminals because they are hard to track. While some may not sympathize with a TV channel with a multibillion dollar market cap, the same blackmail technique could be used against any of us, and there is little likelihood the criminals would be caught.

The defenders of anonymous payments say any currency can be used for illegal means.

“Demanding bitcoin in an extortion is just a new version of an old problem. Kidnappers and extortionists have demanded cash in the past as a way of remaining undetected. Most crime is still conducted with US dollars. I imagine that HBO can still attempt to fight the extortion the old fashion way,” American economist at the Ludwig von Mises Institute Mark Thornton told RT.

No one understands it

There are thousands of articles and FAQs about mining and transferring bitcoins, but let’s be honest. The technology is extremely hard to understand and experts do a terrible job of trying to explain it.

“Many people have heard of bitcoin now, but I agree that the vast majority–99%–don’t know what it really is. Of course, bitcoin can be dangerous. It is certainly very volatile. Most people who own bitcoin do so as an investment rather than as money–a medium of exchange. However, I would not recommend investing in it unless you understand it and know the risks,” Thornton said.

The market speculation aspect of cryptocurrencies is easy to understand with traders trying to make a quick buck. Whether it is rational or safe to invest in something that few understand is mostly ignored by the mainstream media.

Max Keiser of RT’s Keiser Report offers a different view on the subject.

“The problem describing bitcoin is twofold. First, you have to throw out what you think you know about money. Second, you have to become moderately fluent in a few technologies. The beauty of bitcoin is that as the price of bitcoin rises, more people are incentivized to tackle the learning curve out of self-interest. When the price was $3 – when Keiser Report first covered bitcoin – you could afford to ignore it. But as price heads to $5,000 and higher, you can’t afford to ignore the technology and accept the fact that your preconceptions about money are probably wrong,” Keiser told RT.

Cryptocurrencies have no real value

© Benoit Tessier$1 in bitcoin seven years ago is valued at over $1.4 million today

The value of bitcoin has hit an all-time high of above $4,000 this week. A single token is now worth more than three troy ounces of gold. The total value of all cryptocurrencies has surged this year from $17.5 billion to around $120 billion, more than Goldman Sachs and the Royal Bank of Scotland combined.

This phenomenon raises the question of what intrinsic value of something is, whether it’s gold or bitcoin.

“Bitcoin has intrinsic value the same way a gold mine has intrinsic value When you own bitcoin, you own a piece of a network that, like a gold mine, has intrinsic value,” Keiser explains. “This is a bit misleading in that gold supply is worth trillions and bitcoin is worth billions. The real question is, what price would bitcoin need to get to the equal value of gold. The answer is, well into the $100,000 per bitcoin. Will it get there? I think so, yes”.

Cryptocurrencies are a speculative bubble

To other investors and analysts, the digital currencies market is just another tulip mania. The period during the Dutch Golden Age is considered the first recorded speculative bubble. The price of tulip bulbs reached extraordinarily high levels. At its peak, a person could buy a home for two bulbs, before prices collapsed in 1637.

© Andrew BurtonDigital currencies like bitcoin aren’t real – fund warns investors

“Bitcoin can certainly become a ‘bubble.’ The bubble will form in opposition to central bank policies and government threats. A bubble would encourage governments to pop it with new interventionists policies or shutting down the exchanges. So governments do not care about the exchange rate for now, but they easily could as bitcoin continues to increase in value relative to paper currencies,” Thornton told RT.

You could argue the same things can be said about bank notes. However, they are backed by governments, which are interested in keeping their value more or less stable. Governments don’t care about the bitcoin exchange rate.

Max Keiser disagrees.

“No. The US dollar, stocks, bonds, and property are all in bubbles. Bitcoin (and gold) are underpriced vs. these other assets that are in bubbles. bitcoins are very cheap vs. government bonds – that are trading at multi-hundred-year highs – for example,” said Keiser.

Lost cryptocurrency is almost impossible to recover

In 2014, Welshman James Howells says he accidentally tossed a hard drive with 7,500 mined bitcoins. At the time he had mined them, they were worth very little. But today they would be worth almost $25 million. While there are many tutorials to recover bitcoins in case of a technical difficulty, if you don’t know where are your bitcoins are physically, you will likely lose them forever.

“It’s extremely improbable, and effectively impossible [to recover lost coins]. This is what the security of bitcoin is actually based on. If you’ve lost your private key, the system is so secure that you may not be able to recover it,” says Greg Schvey, a bitcoin researcher.

Risk of unknown technical flaws in system

The bitcoin system is still relatively new and could contain unexploited flaws. If such a flaw is found, the exploiter could steal a vast amount of money and even destroy the bitcoin economy. Last month, one of the world’s largest bitcoin exchanges Bithumb was hacked, compromising 30,000 accounts with several million dollars in bitcoin stolen. It is just a fraction of the robbery of the Mt. Gox exchange, where $460 million in bitcoin (at then current prices) disappeared in 2014.

Bitcoin is overhyped

In terms of the main stream media’s responsibility when covering the bitcoin phenomenon, Max Keiser offers a final thought.

“It’s impossible to overhype bitcoin. The way bitcoin is changing society is as profound as Gutenberg’s printing press or Edison’s light bulb,” he said.

Article source: https://www.rt.com/business/399761-bitcoin-overhyped-dangerous/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Qatar’s migrant workers bear brunt of Arab blockade

Buildings are seen on a coast line in Doha, Qatar © Naseem ZeitoonQatar files complaint with WTO over Gulf trade blockade

Saudi Arabia, Egypt, Bahrain and the United Arab Emirates (UAE) blocked Qatar’s border and imposed an embargo after accusing the country of supporting terrorism. As a result, Qatar has been forced to spend more on chartering ships and airplanes to import everything from food to construction materials for the football World Cup.

The supply shortages have made everything more expensive in the country, hitting the poorest segment of the population the hardest, workers from places like India and Nepal.

Ninety percent of Qatar’s 2.7 million population are migrants. Non-Arab foreigners make up the vast majority of Qatar’s population; Indians are the largest community, numbering 650,000 in 2017. In 2004, there were fewer than 750,000 migrants in the country.

Migrant workers are particularly vulnerable because of the kafala labor sponsorship system, where laborers are reliant on their employers for visas, accommodation, and permission to enter or exit the country.

Human Rights Watch has reported that migrants employed by Qatari farms in Saudi Arabia are stuck in the country, as their bosses fled to Qatar in June. South Asian laborers were stranded without wages, food or water.

While Qatar is rich enough to live through years of sanctions because of its gas resources, the embargo may result in worse conditions for migrants.

“The impact could reverberate to South Asia, the Philippines and East Africa where migrants’ families depend heavily on remittances,” Gulf labor researcher Mustafa Qadri told Reuters.

Other workers have complained. For example, a crane operator from Bangladesh explained his employer said wages could be delayed, as the company is running out of steel, previously imported from the UAE.

With reports of thousands of migrants leaving the country, last Wednesday, Qatar announced it would cancel more visas for foreign workers.

Article source: https://www.rt.com/business/399675-qatar-migrant-workers-embargo/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Air Berlin files for insolvency after biggest investor pulls funding

Trading in Air Berlin shares was temporarily suspended until 12:05 GMT.

Reuters / Olivia HarrisMalaysia Airlines ‘technically bankrupt’ – CEO

Air Berlin and its subsidiaries filed the application in a local Berlin court with no bankruptcy protection pursued for its Niki Luftfahrt and Leisure Cargo units, according to the carrier.

The airline said the bankruptcy proceedings would be opened in self-administration with the federal government supporting Air Berlin with a transitional loan of €150 million. The company will continue to operate during the procedure.

“This bridging loan will be made available via the KfW (state development bank) and backed by a federal guarantee,” said the economy and transport ministries in a joint statement.

In recent months customers have faced delays and cancellations. In an attempt to remain solvent, Air Berlin leased 38 planes and crews to bigger rival Lufthansa.

The company also planned to merge its subsidiary Nikki with the airline arm of German tourism group TUI. However, the merger fell apart after Etihad announced it failed to reach an agreement on making a joint venture for the operation.

READ MORE: Aeroflot to start second major Russian airline

Etihad last provided additional funding of €250 million ($293 million) to Air Berlin in April.

The German carrier said it is in talks with Lufthansa over buying parts of the business after the carrier goes bankrupt.

The ministries stated that they are waiting for a decision from another airline weighing the possibility of purchasing parts of the business in the coming weeks.

Article source: https://www.rt.com/business/399670-air-berlin-files-bankruptcy/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Binladin Group to resume building giant Mecca hotel

The project has been delayed for two years due to the financial squeeze following the drop in oil prices.

 A view of the ruins of the city of Diriyah, 20 kilometers west of Riyadh © Fahad ShadeedSaudi Arabia announces mega tourism project on Red Sea

When completed, the 10,000-room mega hotel will have 70 restaurants, shopping malls, several helipads, a wing for the Saudi royal family and even a ballroom.

Restarting the project is part of the broad Saudi program aimed at diversifying the kingdom’s economy to decrease its dependence on oil.

The Saudi Binladin Group, which is leading the construction, will get financial help from the government. The company was badly hit by the downturn in the building sector in recent years due to falling oil prices.

Sub-contractors have been asked to submit pricing proposals to Saudi Binladin by mid-September, according to unnamed sources close to the matter, as quoted by Reuters.

“With a clearer grasp on its finances, the government has allocated a portion of its budget toward completing key projects,” an executive in the Binladin group told the agency.

Saudi Binladin Group reportedly has debt of nearly $30 billion. Earlier this year, the company’s creditors agreed to extend a four billion riyal ($1.1 billion) Islamic credit facility to back construction work at Mecca’s Grand Mosque.

“The Ministry of Finance is taking a lead role in the hotel project. This is positive for the banking sector,” a Saudi banker said as quoted by Reuters.

The kingdom’s state finances have been boosted this year by moderately higher crude prices and some austerity measures. According to the latest data from the Ministry of Finance, the budget deficit narrowed to 46.5 billion riyals ($12.4 billion) from April through June against about 58.4 billion riyals a year ago.

Industry and tourism, Islamic tourism, in particular, are among the prioritized sectors Riyadh is relying on to eliminate the kingdom’s dependence on oil.

READ MORE: Saudi Arabia pushes for solar energy project to create thousands of jobs

Over two million Muslims come to Mecca every year for the Hajj pilgrimage with the country’s authorities planning to increase the number to 2.5 million in three years.

Article source: https://www.rt.com/business/399654-saudi-arabia-resume-mecca-hotel/?utm_source=rss&utm_medium=rss&utm_campaign=RSS